re: Surprise! Neocons Dislike End the Fed

Neocon Ken Silber’s blathering attack on Ron Paul’s magnificent new book, End the Fed, is a bundle of nonsense, as Lew has already pointed out.  In addition to Lew’s comments, I would add that Silber’s statement that auditing the Fed would ruin its “independence” is especially absurd nonsense.  The Fed has NEVER been independent of politics, and neither has any other central bank in the world.  A government-run bank that is independent of politics is as likely as a cat that barks like a dog, as Milton Friedman used to say. 

Silber does not mention the fact that, in addition to pursuring a zero-interest rate policy that caused the housing bubble (as Paul Krugman advised in a 2003 column) in the first place, the Fed also led the way in pressuring/extorting/forcing mortgage lenders to make bad loans to unqualified “sub-prime” borrowers by enforcing the Community Reinvestment Act and threatening discrimination lawsuits for making too few bad loans in “poor” neighborhoods.  And the Fed regulates every single aspect of financial markets, contrary to Silber’s dumb statement that too little regulation was the problem, and empowering the Fed with even more power is the “solution.”

The Fed has always been a source of corporate welfare and bailouts for various private interests, from the housing industry to Wall Street investment bankers.  Silber ignores this truth and spreads the complete falsehood that Ron Paul’s book claims that the Fed is a private, and not a government institution.  Yeah, Ron Paul, who has famously grilled Fed Chairmen at House Banking Committee hearings since the late 1970s, is unaware that the Fed is part of the government!  Is Silber really that dense, or is he lying through his teeth?

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11:36 am on September 9, 2009